Intermodal Freight Transportation

Vasco Reis, Rosario Macario

• Publisher: Elsevier
• Year: 2019
• ISBN:
  9780128144657
• Topic: Tecnologia e ingegneria
• Subtopic: Trasporto e navigazione

Intermodal Freight Transportation conceptualizes intermodal transport as a set of physical, logical, financial and contractual flows, examining the barriers that impact intermodal freight services and the resulting performance variables. The book covers transport modes, agents, supply and demand patterns, key drivers, trends influencing the freight transportation sector, the evolution of supply and logistics chains, and the impacts of technological advancements, such as autonomous vehicles and e-commerce. In addition, the book covers transport agents, such as shippers, freight forwarders, integrators, and customs, as well as the demand for freight transport services and the key properties of goods.

Readers will find a variety of new tools for analyzing and building effective transport chains that addresses component technology, information, responsibility, and financing dimension, along with sections on key organizational, regulatory, infrastructure and technological barriers. The book concludes with a look into the future of the freight transport sector.

• Presents a step-by-step approach that introduces key topics for understanding efficient intermodal transportation
• Focuses on the concept of fitness between the modes of transport profiles
• Contains numerous, real-world case studies throughout
• Examines performance metrics

Chapter 1

Forces shaping the freight transport sector

Abstract

The literature is populated with definitions of logistics and supply chain management. It is important to note from the outset that one of the activities of supply chain management is logistics. The Council of Supply Chain Management Professionals (2014) states that “logistics is that part of the Supply Chain Management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between point of origin and point of consumption in order to meet customers’ requirements.”

Christopher (2011) defines logistics as “the process of strategically managing the procurement, movement and storage of goods.” Within the supply chain, any decision of one activity will inevitably spread up and downstream, and the interaction among activities is not always positive. In fact, gains in one activity may result in loss in another one.

This chapter provides a global overview of the forces that influence freight transport sector. The discussion of key drivers and trends in logistics and supply chain management will follow the STEEP approach. The STEEP approach is a known technique used in marketing and business analysis to evaluate various external factors that impact an organization or sector.

Keywords

Supply chain management; Logistics; Drivers; Trends; Freight

Chapter outline

• 1.1 Positioning the freight transport sector
• 1.2 Drivers and trends in logistics and supply chain management
• References
• Further reading

1.1 Positioning the freight transport sector

Production and distribution management techniques have evolved greatly in Western Europe in recent decades (Fig. 1.1). Up to the 1960s, the various activities that make up the process of producing and distributing goods were largely carried out independent of each other, with few interactions between them. At the time, trade was subject to heavy regulation and the international transport of goods was lengthy and costly (Bayly, 2004). Manufacturers applied mass production techniques with the aim of minimizing unit production costs. Accordingly, products tended to be very similar, and there was very little scope in terms of product or process flexibility. New product development was slow and relied mostly on in-house technology and capacity. Customers’ needs were seldom taken into consideration when new products had to be developed.

Fig. 1.1 Evolution of management techniques. (Adapted from Hesse, M., Rodrigue, J.-P., 2004. The transport geography of logistics and freight distribution. J. Transp. Geogr. 12(3), 171–184. doi:10.1016/j.jtrangeo.2003.12.004.)

Production and distribution were based on large inventories that shielded companies against any fluctuation, be it in supply or unpredictable bottlenecks in delivery. Naturally, companies invested substantial amounts of working capital in work in process inventories. The various activities associated with production and distribution were managed independently, largely without any kind of co-ordination and exchange of information between the various areas within the manufacturing companies. The 1970s saw the start of intense global competition, which has forced companies to reduce costs and offer higher quality and more reliable products. Manufacturing Resource Planning was introduced in manufacturing firms, with managers realizing the major drawbacks (in terms of cost, quality, new product delivery, and delivery lead time) of having huge process inventories. Moreover, they acknowledged the importance of new materials management concepts in the improvement of firms’ performance levels.

Just in Time and other similar management techniques began to be used in order to improve manufacturing efficiency and decrease cycle time. These techniques have reduced the amount of products kept in inventory. It was through the reduction in inventory levels, accompanied by reductions in terms of unexpected changes in supplying and scheduling problems, that manufacturing companies began to realize the potential benefits and importance of a strategic and cooperative buyer-supplier relationship (Tan, 2001). This led to the emergence of the Supply Chain Management concept—a strategic partnership between agents involved in the production of a service or goods. Progressively, the strategic partnership was expanded by adding the functions of physical distribution and transport to the production and distribution functions (e.g., transport and warehousing). New operators offering bundled services, which had hitherto been offered separately, such as transport, storage, invoicing, and billing, or the return of defected products, emerged in the market. These operators became known as Logistic Operators and the services they offer are designated as integrated logistics services.

In the 1990s, continuous evolution followed, with companies further expanding their uses and practices and including strategic supplier products (this has had major benefits; for example, it was possible put an end to product inspection, as suppliers began to certify product quality). Furthermore, there was increased exploitation of suppliers’ strengths and joint efforts in the development of new products. Finally, in some supply chains, the seamless integration of retailers’ physical distribution with transport partners was achieved. Meanwhile, the focus of the supply chain moved closer toward customers. Customers’ needs and expectations now drove all changes throughout the firms’ internal and external linkages.

The 1990s were also characterized by profound and rapid technological developments, of which the Internet is undoubtedly the most important. The Internet, which had taken its first steps in the previous decades, now began its rapid worldwide growth. Specific protocols of communication and electronic data interchange were developed and implemented, resulting in the complete electronic integration of the supply chains. The consequences were immediate and immense. Sales, stocks, transport, and production rhythms became visible almost instantaneously. Production and distribution could be adjusted to actual consumer demands and did not need to be forecast. Stocks could be further streamlined, as the actual patterns of consumption and transport were known. Inefficiencies could be spotted and corrected.

The 2010s marked the beginning of the so-called 4th Industrial Revolution, which is characterized by significant technological developments, which began to blur the lines between the physical, digital, and biological domains—collectively these are referred to as cyber-physical systems. Several technological breakthroughs have been achieved, such as robotics, artificial intelligence, nanotechnology, quantum computing, biotechnology, the Internet of Things, blockchain, fifth-generation wireless technologies (5G), additive manufacturing, 3D printing, and or fully autonomous vehicles. Parallel to this, the progressive digitalization of societies and economies is leading to new trends in automation and data exchange, with the development of new business and market opportunities, such as e-commerce and the shared economy.

Today, the production processes in industry involve a multiplicity of firms located in different countries (and continents), all committed to the production and sale of the final product. Goods are transported successively between these actors, from the source (the raw material) to the finished product; at each level, value is added to the product. The establishment of these relationships among all partners of a logistics chain has led to the development of the concept of Supply Chain Management (Fig. 1.1). Supply Chain Management encompasses all firms as a unified “virtual business” entity.

Despite the importance of Supply Chain Management in today’s industrial sector, no single definition of Supply Chain Management has yet been established. Mentzer and his colleagues (2001) have defined Supply Chain Management as the systemic, strategic coordination of the traditional business functions and the tactics across these business functions within a particular company and across businesses within the supply chain, for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole.

One may, hence, consider that Supply Chain Management refers to the management of all actors involved in the production and distribution of a given product, having the aims of optimization of the system and maximization of the benefits for the overall Supply Chain—even if this means that some actors do not see maximization of their benefits. The concept of Supply Chain Management has been used to describe three different purposes: (1) the purchasing and supply activities of manufacturers; (2) transport and logistics functions of the merchants and retailers; and (3) all value-adding activities (from the raw materials extractors to the end users, including recycling).

Supply Chain Management is a complex activity (Fig. 1.2). It includes a wide array of activities, such as marketing, sales, research and development, forecasting, planning, production, assembly, purchasing, logistics, information systems, finance, and customer service. A considerable set of flows move up and downstream in terms of the agents in the supply chain, including products, services, information, financial resources, demand, or forecasts (Tan, 2001). The goals of Supply Chain Management include to achieve customer satisfaction by providing greater value for money, in order to secure a competitive advantage over other supply chains.

Fig. 1.2 Activities of Supply Chain Management. (Adapted from Mentzer, J.T., DeWitt, W., Keebler, J.S., Min, S., Nix, N.W., Smith, C.D., Zacharia, Z.G., 2001. Defining supply chain management. J. Bus. Logist. 22(2), 1–25. doi:10.1002/j.2158-1592.2001.tb00001.x.)

It is important to note that one of the activities of Supply Chain Management is logistics. Again the literature is populated with definitions. Accordingly to the Council of Supply Chain Management Professionals (2014), logistics is that part of the Supply Chain Management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between point of origin and point of consumption in order to meet customers’ requirements. Christopher (2011) defines logistics as the process of strategically managing the procurement, movement and storage of materials, parts and finished inventory (and the related information flows) through the organisation and its marketing channels in such a way that current and future profitability are maximised through the cost-effective fulfilment of orders. Logistics thus has to do with the efficient movement of goods between agents of the supply chain, i.e., making the right products available in the right amount and...